Election Ushers in Home Care Minimum Wage Hikes

Election Ushers in Home Care Minimum Wage Hikes

In what has been described as a stunning set of results, America’s election decided a heck of a lot more than selecting the nation’s next president. It also brought forth a wave of minimum wage increases at the state level that will impact home care businesses and workers.

Specifically, four states decided to raise minimum wage rates through ballot measures—Arizona, Colorado, Maine and Washington. The move comes after the nationwide movement for higher wages, dubbed the Fight for $15, has gained significant momentum since its inception nearly four years ago.

Since then, roughly 22 million workers have seen raises, with 10 million guaranteed a path to $15 per hour, according to the Fight for $15 organization. Members and advocates of the movement include workers from the fast food industry, airports, child care, home care and more.

Covering Rising Labor Costs

Home health care and home care companies have already been impacted in states where the minimum wage has been raised to $15 per hour, including California and New York. One California home care provider even had to branch out into other service lines by adding a senior living component to his business after he estimated a 30% drop in business after raising prices due to minimum wage hikes in the state. Other providers have turned to cutting hours and similarly increasing their rates.

For home care providers that rely on federal and state payors, increasing wages can’t be offset by raising rates on patients. And reimbursement rates aren’t keeping up with rising labor costs.

“While I know every provider would like to pay their workers more, our state reimbursement rates (Medicaid/state funded programs) have been stagnant for nearly 15 years,” Vicki Sebell, executive director of Home Care & Hospice Alliance of Maine, told Home Health Care News. “I feel strongly that when the states (government) increase costs for providers, the providers should be adequately reimbursed, especially if 100% of the care delivered by the agency is government funded. Then, their reimbursement should reflect the added costs of doing business. We aren’t LL Bean, where you can simply raise the price of hunting boots or flannel shirts to cover your losses.”

In Maine, the minimum wage will rise to $9 per hour in 2017, up from the current $7.50 per hour, with escalators in place up to $12 per hour by 2020 and further increases at the same rate of cost of living. Portland, Maine, approved an even higher wage level, which means some agencies have to pay multiple wage rates, depending on which municipality their workers provide services.

Rising minimum wage rates in different areas of a state have forced some businesses to raise rates for some services across the board. For example, sick and safe leave benefits, as well as higher wages, were granted in Seattle before the rest of the Washington state. Ballot measures approved on Nov. 8 will increase the minimum wage to $13.50 in Washington state by 2020.

“The biggest impact is on the live-in rate,” Susan “Sam” Miller, CEO and co-owner of Lynnwood, Washington-based CareForce, Inc., told HHCN. “There was a time when live-in could compete with assisted living and/or skilled nursing. In combination with the elimination of the companion exemption and the increase in minimum wage beginning next year, I am pretty sure that most people will be priced out of the live-in market.”

The higher wages in one city have pushed prices up across the state so businesses can offset their costs and stay competitive in a tightening labor market.

“In addition, we, for the last two years, had two prices for live-in—one in Seattle proper and one outside of Seattle,” Miller said. “But pressure from caregiver shortages is forcing us to move to one price which will follow the Seattle minimum wage scale.”

Looking Ahead

While the election may have illuminated steep partisan lines across the country, some in home care are feeling optimistic about opportunities to work with elected officials.

“Fortunately, we work well with all elected officials—perhaps because we belong to the ‘Home Care Party’,” Donna DeBlois, president and CEO of MaineHealth Care at Home, told HHCN. “The need for home care services has no party lines.”

Both the Democratic and Republican parties singled out home care within the national platforms during the campaign season. A home care worker was even a featured speaker at the Democratic National Convention, where she spoke about her advocacy work for a living wage.

Fight for $15 has organized a national protest on November 29—the movement’s four-year anniversary— with plans for fast food, airport, child care and home care workers to engage in civil disobedience across the nation. Workers involved are demanding a $15 hourly wage, in addition to union rights. The organization has also highlighted the need for justice for minorities and immigrants in the wake of heightened immigration scrutiny in the aftermath of the election.

“In all, tens of thousands from coast to coast will protest Nov. 29 to underscore to the country’s biggest corporations that they must act decisively to raise pay for fast-food, airport, home care, child care and higher education workers, among others, and to let President-elect Donald Trump, members of Congress, governors, state legislators and other elected leaders know that the 64 million Americans paid less than $15/hour are not backing off their demand for $15/hour and union rights,” the group proclaimed when announcing the day of civil disobedience.

Association groups, including the National Association for Home Care & Hospice (NAHC), have fought hard against overtime rules and increases to minimum wage around the country. Most notably, the organization took the recent decision by the Department of Labor (DOL) to guarantee minimum wage and overtime protections to home care workers all the way to the Supreme Court. The rule took effect in 2015.